Eversource 2012 Annual Report Download - page 128

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charges recorded to the reserve and for the year ended December 31, 2010, a pre-tax charge of $2.6 million was recorded to reflect
estimated costs associated with the site. HWP's share of the costs related to this site is not recoverable from customers.
In 2008, the MA DEP issued a letter to HWP and HG&E, representing guidance rather than a mandate, providing conditional
authorization for additional investigatory and risk characterization activities and indicating that further removal of tar in certain areas was
needed. HWP implemented several supplemental studies to further delineate and assess tar deposits in conformity with the MA DEP's
guidance letter. In December 2012, the MADEP advised that all work to date with this site continues to meet regulatory expectations.
In 2010, HWP delivered a report to the MA DEP describing the results of its site investigation studies and testing. Subsequent
communications and discussions with the MA DEP have focused on the course of action to achieve resolution of these matters, and are
ongoing.
The $2.1 million reserve balance as of December 31, 2012 represents estimated costs that HWP considers probable over the
remaining life of the project, including testing and related costs in the near term and field activities to be agreed upon with the MA DEP,
further studies and long-term monitoring that are expected to be required by the MA DEP, and certain soft tar remediation activities.
Various factors could affect management's estimates and require an increase to the reserve, which would be reflected as a charge to
Net Income. Although a material increase to the reserve is not presently anticipated, management cannot reasonably estimate
potential additional investigation or remediation costs because these costs would depend on, among other things, the nature, extent
and timing of additional investigation and remediation that may be required by the MA DEP.
CERCLA: The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and its
amendments or state equivalents impose joint and several strict liabilities, regardless of fault, upon generators of hazardous substances
resulting in removal and remediation costs and environmental damages. Liabilities under these laws can be material and in some
instances may be imposed without regard to fault or for past acts that may have been lawful at the time they occurred. Of the total sites
included in the remediation and long-term monitoring phase, 10 sites (2 for CL&P, 4 for NSTAR Electric, 4 for PSNH and 1 for
WMECO) are superfund sites under CERCLA for which the Company has been notified that it is a potentially responsible party but for
which the site assessment and remediation are not being managed by the Company. As of December 31, 2012, a liability of $1 million
($0.4 million for CL&P, $0.1 million for NSTAR Electric and $0.4 million for PSNH) accrued on these sites represents management's
best estimate of its potential remediation costs with respect to these superfund sites.
Environmental Rate Recovery: PSNH, NSTAR Gas and Yankee Gas have rate recovery mechanisms for environmental costs. CL&P
recovers a certain level of environmental costs currently in rates but does not have an environmental cost recovery tracking
mechanism. Accordingly, changes in CL&P's environmental reserves impact CL&P's Net Income. WMECO does not have a separate
regulatory mechanism to recover environmental costs from its customers, and changes in WMECO's environmental reserves impact
WMECO's Net Income.